Buy-to-let frequently providing retirement income, says survey

Of all of the reasons for those owning a portfolio of buy-to-let properties to invest in the right landlords rent insurance so that they can expand their portfolio further and boost their income, it appears that using such income as a pension is one increasingly prominent motivating factor. That’s according to a major survey by The Mail on Sunday, which found that it appears to be income rather than capital growth that has led most current or prospective buy-to-let investors to the sector, Advanced Rent (http://www.advancedrent.co.uk) reports.

The survey polled 1,065 readers – including both current buy-to-let investors and those considering moving into it – about their attitudes towards the sector. The findings showed strong confidence in this investment sector, with 65 per cent either using or planning to use buy-to-let as a pension alternative. The sector was also favoured to cash deposits by 60 per cent of respondents, with 69 per cent even backing buy-to-let as a less risky alternative to equities.

30 per cent of respondents owned one property, compared to 39 per cent who owned between two and five. 27 per cent of investors planned to add to their portfolio in the next year, with further purchases being ‘considered’ by 33 per cent. It was also clear from the survey that many landlord rent insurance policyholders place the greatest emphasis on the income that can be delivered by buy-to-let, with 85 per cent of respondents reckoning that over the next five years, it will be income, rather than capital growth, that provides the majority of returns.

The results will be unsurprising to many of those who have already taken advantage of rent indemnity policies as a result of becoming a buy-to-let landlord, having grown disillusioned by alternative sources of retirement income. While pension funds are continuing to perform disappointingly, with poor interest rates also being delivered on savings, more and more people in the UK of all ages are being forced to rent rather than buy a home, creating ready demand and an associated steady income for investors. Whereas putting cash on deposit results in annual interest that barely exceeds one per cent, the average buy-to-let yield is presently about six per cent.

The findings only confirm the continuing emergence of buy-to-let as a crucial part of many lenders’ portfolios. The inability of many prospective home buyers to obtain a mortgage is pushing many into the private rented sector, ensuring that demand for rental property continues to outstrip supply, which has kept yields up. Nor do yields look likely to drop any time soon, with buy-to-let investors enjoying returns nearing 10 per cent in some regions. Such figures far exceed what either savings accounts or the stock market can offer.

This only makes it all the more unsurprising that so many landlords are taking advantage of products like Rent In Advance and Rent Guaranteed from Advanced Rent (http://www.advancedrent.co.uk) to provide them with the longer-term financial security that they require to confidently expand their portfolios.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.